The Australian Government is poised to implement substantial reforms targeting unfair trading practices, a domain currently unregulated under the Australian Consumer Law. These reforms, prompted by persistent instances of harmful conduct affecting consumers and small businesses, aim to close existing gaps in consumer protection and foster fairer business practices.
The proposed reforms are expected to impact all business-consumer and business-small business transactions, potentially leading to heightened regulatory uncertainty and increased compliance burdens.
The Australian Competition and Consumer Commission (ACCC) has been a vocal advocate for these changes, citing examples of detrimental business conduct that, while not breaching existing laws, inflict real harm on consumers.
Unfair trading practices encompass a spectrum of behaviors that fall short of unconscionable conduct, yet still pose significant risks to consumers and small businesses. Examples include concealed data collection tactics, exploitation of supply chain imbalances, and opaque targeting strategies, among others.
The Government is evaluating four policy options to address these issues:
- Maintaining the status quo, which would preserve existing consumer laws without targeting unfair trading practices specifically.
- Expanding the statutory unconscionable conduct provision to cover unfair conduct that may not meet the current threshold for unconscionability.
- Introducing a broad, principles-based prohibition on unfair trading practices.
- Combining a general prohibition with specific prohibitions targeting defined unfair trading practices.
Each option carries its own set of potential impacts and challenges, ranging from regulatory uncertainty to increased compliance costs. Businesses may need to adapt their compliance practices and procedures to align with new obligations and penalties.
The Government is soliciting feedback from stakeholders until November 29, 2023, to inform its decision on the preferred approach. Businesses are encouraged to provide input on various aspects, including the clarity of the concept of unfairness, gaps in current legislation, appropriate consequences for engaging in unfair practices, and international comparisons of consumer protection regimes.
Following the consultation period, the Government will produce a Decision Regulation Impact Statement (DRIS) to outline the results and identify the preferred policy option. Businesses should anticipate potential changes to law and be prepared to review their policies and procedures accordingly to ensure compliance and mitigate risks in their dealings with consumers and small businesses.
Contact Legalease Lawyers on 0402 121 124 to guide you through the process.
